https://www.profitconfidential.com/u-s-economy/economy/will-greece-selling-its-gold-reserves-avoid-an-economic-collapse-in-2015/
Will Greece Sell Its Gold Reserves?
Jing Pan, B.Sc, MA
Profit Confidential
2015-07-10T14:11:08Z
2017-09-25 03:41:31 If Greece sells its gold reserves, its banks could reopen—for the moment at least.
Economy
https://www.profitconfidential.com/wp-content/uploads/2015/07/Greece-Selling-its-Gold-Reserves.jpg There is a way for Greece to avert an economic collapse in 2015, momentarily at least. Hint: it involves the country’s stockpiles of gold.
Right now, Greek banks are closed. There is a daily withdrawal limit of 60 euros on bank machines. Some bank machines have run out of 20 euro notes and people can only withdraw 50 euros. Moreover, gas stations are running out of fuel, and supermarkets are being emptied at surprising speeds.
There is a cure. And that is the country’s 112.5 tons of official gold reserves. (Source: World Gold Council, last accessed July 9, 2015.)
Simple math will show that 112.5 tons of gold equates to $4.18 billion at today’s gold price. That would be a huge amount of money for Greece. If the country decides to sell its gold, it could use the proceeds to make its 1.5 billion euro ($1.7 billion) interest payment to the International Monetary Fund (IMF). Moreover, it can also put money into the country’s banking system, so pensioners can get their checks and people can do business.
The country is not selling its gold, however, and there is a good reason for it. There has been a debate on whether Greece should leave the eurozone and start its own currency. Bringing back the drachma would give Greece the ability to set its own monetary policy. However, to secure a new currency, Greece would need to have a substantial amount of gold reserve as a guarantee to redeem promises to pay depositors, paper money holders, and trading partners. With its lackluster economy, gold is of significant importance if the country decides to leave the eurozone.
Cyprus, one of the smallest economies in the eurozone, was reported to be thinking of liquidating its gold reserves in 2013. The country was in deep financial trouble, with its banks facing insolvency problems. Eventually, Cyprus received a bailout and did not sell its gold. Note that Cyprus only had 13.9 tons of gold reserves, which is quite a small amount compared to Greece’s 112.5 tons.

Will Greece Sell Its Gold Reserves?

By Jing Pan, B.Sc, MA Published : July 10, 2015

There is a way for Greece to avert an economic collapse in 2015, momentarily at least. Hint: it involves the country’s stockpiles of gold.

Right now, Greek banks are closed. There is a daily withdrawal limit of 60 euros on bank machines. Some bank machines have run out of 20 euro notes and people can only withdraw 50 euros. Moreover, gas stations are running out of fuel, and supermarkets are being emptied at surprising speeds.

There is a cure. And that is the country’s 112.5 tons of official gold reserves. (Source: World Gold Council, last accessed July 9, 2015.)

Simple math will show that 112.5 tons of gold equates to $4.18 billion at today’s gold price. That would be a huge amount of money for Greece. If the country decides to sell its gold, it could use the proceeds to make its 1.5 billion euro ($1.7 billion) interest payment to the International Monetary Fund (IMF). Moreover, it can also put money into the country’s banking system, so pensioners can get their checks and people can do business.

The country is not selling its gold, however, and there is a good reason for it. There has been a debate on whether Greece should leave the eurozone and start its own currency. Bringing back the drachma would give Greece the ability to set its own monetary policy. However, to secure a new currency, Greece would need to have a substantial amount of gold reserve as a guarantee to redeem promises to pay depositors, paper money holders, and trading partners. With its lackluster economy, gold is of significant importance if the country decides to leave the eurozone.

Cyprus, one of the smallest economies in the eurozone, was reported to be thinking of liquidating its gold reserves in 2013. The country was in deep financial trouble, with its banks facing insolvency problems. Eventually, Cyprus received a bailout and did not sell its gold. Note that Cyprus only had 13.9 tons of gold reserves, which is quite a small amount compared to Greece’s 112.5 tons.

Dear Reader: There is no magic formula to getting rich. Success in investment vehicles with the best prospects for price appreciation can only be achieved through proper and rigorous research and analysis. We are 100% independent in that we are not affiliated with any bank or brokerage house. Information contained herein, while believed to be correct, is not guaranteed as accurate. Warning: Investing often involves high risks and you can lose a lot of money. Please do not invest with money you cannot afford to lose. The opinions in this content are just that, opinions of the authors. We are a publishing company and the opinions, comments, stories, reports, advertisements and articles we publish are for informational and educational purposes only; nothing herein should be considered personalized investment advice. Before you make any investment, check with your investment professional (advisor). We urge our readers to review the financial statements and prospectus of any company they are interested in. We are not responsible for any damages or losses arising from the use of any information herein. Past performance is not a guarantee of future results. All registered trademarks are the property of their respective owners.